Michigan District Court Tosses Marijuana Accessories Seizure Challenge

The U.S. District Court for the Eastern District of Michigan granted the U.S.'s motion to toss a six-count case brought by CBD and hemp manufacturer ASHH over the seizure and detention of lithium-ion batteries, classified by CBP as "drug paraphernalia." Judge Robert Cleland held that the plaintiff had other remedies at law via the administrative process and that CBP's seizures are not final agency action (ASHH v. U.S., E.D. Mich. #21-11210).

CBP seized multiple shipments of ASHH's goods from November 2019 to May 2021. The customs agency classified the shipments as drug paraphernalia, prompting the company to challenge this label and argue that Michigan's marijuana legalization laws exempt the goods from seizure (see 2105260065). The importer raised claims under three different statutes: Rule 41(g) of the Federal Rule of Criminal Procedure, the Administrative Procedure Act and the Constitution's takings clause.

In a motion to dismiss, the U.S. said a 1989 6th Circuit case, Shaw v. U.S., precludes jurisdiction in the district court for the Rule 41(g) claims because an "adequate remedy at law" exists (see 2108040052). Multiple legal remedies are available for challenging CBP's seizure of merchandise, the defense said, including filing a petition for remission of forfeiture -- a step ASHH took. ASHH also could have chosen to pursue legal remedies available under 19 U.S.C. Section 1608 by filing a claim and posting a bond, leading to a U.S.-led judicial forfeiture action, the motion said.

Cleland agreed. Although ASHH filed petitions to invoke administrative processing of the seizures, the company has "effectively ignored" this adequate remedy along with the judicial remedy initiated by the U.S. because it has the power to request those proceedings through the filing of a claim and cost bond, he said. "Thus, Plaintiff apparently ignores its ability to obtain the remedy at law available to it and instead maintains that 'there is no forfeiture action providing Plaintiff another remedy at law,'" the judge said. "But Plaintiff's complaint clearly establishes that it received notice of how it can promptly obtain the specific remedy it seeks, and the court agrees with Defendants that this forecloses Plaintiff's ability to bring an equitable action."

The U.S. also tapped a common defense of seizure challenges (see 2106300034), claiming the seizure doesn't constitute final agency action and cannot be challenged under the APA. The judge agreed. He said ASHH must challenge the seizure either through the petition process or through the U.S.'s judicial action.

"In summary, Plaintiff's complaint largely demonstrates that it seeks to circumvent the statutory procedures available to it," the judge said. "By pursuing its remedy at law, Plaintiff can contest the government's seizure of Plaintiff's property and, if successful, secure the return of its products. At the current juncture -- where there are petitions for remission outstanding and apparently no actual requests for the initiation of forfeiture proceedings -- the court is unable to permit its claims to proceed. Its takings claim, similarly, cannot go forward based on the complaint and its attached exhibits."